Net liabilities of Mutual Funds rise

MYMBAI: Net foreign currency liabilities of mutual funds increased by 60% in FY'12, a report released by the Reserve Bank of India on Monday said.

While, foreign liabilities of mutual funds increased by 42% from Rs 21420 crore in March 2011 to Rs 30470 crore in March 2012, their foreign assets declined by 42% from Rs 4730 crore in March 2011 to Rs 3830 crore at end-March 2012. As a consequence, their net liabilities increased by 60% from Rs 16690 crore in March 2011 to Rs 26640 crore in March 2012.

Foreign liabilities of mutual funds essentially comprise, units issued to non-residents and other foreign liabilities arising out of unpaid income/ dividend to non-residents, sale proceeds pending repatriation, etc.

United Arab Emirates accounts for the highest liabilities accounting for 26.7% of foreign liabilities of MFs in FY'12, followed by USA and UK with share of 9.7% and 4.9% respectively.

Foreign assets of MFs are essentially investments in equity , debt securities and other foreign assets. Luxembourg with share of 55.6 % in March 2012 accounted for the major share of the foreign portfolio assets of MFs. This was followed by the USA (15.8 % ) and Hong Kong (6.5 %).

Foreign liabilities of Asset Management Companies associated with the MFs increased from Rs2500 crore in March 2011 to Rs 2850 crore by March 2012. On the other hand, their foreign assets declined from Rs 170 crore in March 2011 to Rs140 crore in March 2012. As such, their net liabilities increased from Rs 2330 crore in March 2011 to Rs2720 crore in March 2012.